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CNN Live At Daybreak

Terror Suspects Arrested in California Terror Probe; Silent Soccer Game; X-Treme Surfing

Aired June 08, 2005 - 06:29   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


ANNOUNCER: From the Time Warner center in New York, this is DAYBREAK, with Carol Costello and Chad Myers.
CAROL COSTELLO, CNN ANCHOR: And good morning, everyone.

New details this morning on terror suspects arrested in California. We'll have a live report for you straight ahead.

But first, "Now in the News."

We could learn more today about a missing 18-year-old Alabama student. Two security guards for a hotel in Aruba are set to appear in court today. Their attorney says prosecutors are looking at them as possible murder suspects in the disappearance of Natalee Holloway.

The U.S. Senate votes today on the nomination of California Supreme Court Justice Janice Rogers Brown to the federal appeals court for the District of Columbia. Brown was nominated to the post two years ago.

It's billed as the world's biggest permanent indoor sculpture, and it opens to the public today at Spain's Guggenheim (ph). It's called the "Matter of Time." The steel work is nearly one-and-a-half football fields in length. It weights 1,200 tons. American artist Richard Serra (ph) created the sculpture.

To the forecast center.

(WEATHER REPORT)

COSTELLO: In our "Security Watch" this morning, we're going to talk more about those arrests stemming from a terrorism investigation in Lodi, California. Federal agents have arrested four men. Two of those arrested are top Muslim leaders in Lodi. The other two, a father and son, appeared in federal court on charges they lied to agents.

Chris Lawrence joins us now live from Lodi with more details on this.

Good morning -- Chris.

CHRIS LAWRENCE, CNN CORRESPONDENT: Good morning, Carol.

We are getting some new information about these arrests. They have all happened since Sunday. And they were part of an ongoing investigation by federal officials into terrorist activities.

Two of the men arrested were top Muslim leaders here in Lodi, California, where we are. One is the cleric imam, or spiritual leader, of a local mosque. And the other is the former leader of that same mosque.

One of those top Muslim leaders, one of the men who was arrested in this federal investigation, actually publicly condemned the September 11 terrorist attacks. And he issued a declaration of peace with Christian and Jewish leaders in that community three years ago after September 11.

And then the other two were a father and son: 47-year-old Umer Hayat and 22-year-old Hamid Hayat. And Hamid Hayat, the younger Hayat, has been accused in this federal complaint of lying about involvement in a terrorist training camp, an al Qaeda training camp in Pakistan.

Basically, details of the investigation by the Joint Terrorism Task Force will be made public later this morning. Officials aren't saying much about the case until then, probably at 10:00 in the morning Pacific Time. We will get some more information.

But right now, we also know that the two Islamic leaders, the two imams, will be detained on immigration charges. The father and son, the Hayats, are both U.S. citizens, and they are being held in the local jail here near Lodi, California.

COSTELLO: So, Chris, can you clarify how these four may be connected?

LAWRENCE: Well, basically what we were able to determine, "The Los Angeles Times" right now is reporting that the two imams were taken into custody after they were seen meeting with the Hayats in Lodi here over the weekend. FBI spokesmen would not discuss the details.

But "The L.A. Times" quoted an affidavit filed in the case that said the younger Hayat failed a polygraph test over the weekend, in which he denied having attended an al Qaeda training camp in Pakistan. Well, that affidavit said he later he admitted that he trained there for six months between the years of 2003 and 2004.

His father was arrested for lying about giving his son an allowance, a $100 monthly allowance, while he attended that camp. This is all reported by "The Los Angeles Times."

COSTELLO: I'm sure we'll know much more later in the day. Chris Lawrence reporting live from Lodi, California, this morning.

A reminder to stay tuned to CNN day and night for the most reliable news about your security.

When President Bush's closest ally, Tony Blair, came to visit, they were supposed to focus on aid to Africa. The president and the British prime minister announced plans to write off a sizable chunk of Africa's debt. But as you probably expected, Iraq became a focus of the talks.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Both of us didn't want to use our military. Nobody wants to commit military into combat. It's a last option. The consequences of committing the military are very difficult. The hardest things I do as the president is to try to comfort families who have lost a loved one in combat. It's the last option that the president must have, and it's the last option I know my friend had as well.

(END VIDEO CLIP)

COSTELLO: Both leaders denied allegations in a British government memo, which stated the Bush administration wanted to remove Saddam Hussein through military action. And that -- quote, "The intelligence and the facts were being fixed around that policy."

In Iraq, a major operation targets insurgents near the Syrian border. It's urban warfare as U.S. and Iraqi forces carry out raids against specific targets and anything that looks suspicious. Troops are patrolling the streets in tanks with helicopters overhead. At least 28 suspected insurgents have been detained.

North Korea says it is ready to return to six-party nuclear talks, but has not said exactly when. A statement today from North Korea's official news agency quotes the foreign minister as saying, it's all up to Washington to establish the right environment for getting the talks back on track.

There will be no fanfare today, however, when North Korea plays a soccer game against Japan -- literally. In fact, there will be no fans at all.

For an explanation, we're joined by CNN's Aneesh Raman. He's in Bangkok, Thailand, which is the site of today's game.

Hello -- Aneesh.

ANEESH RAMAN, CNN CORRESPONDENT: Carol, good morning.

It is a surreal moment, as you say, for Japanese soccer fans, getting under way in a matter of moments. It's the game that by all expectations will get them into next year's World Cup. But the 30,000-seat stadium is empty. No spectators have been allowed in.

The reason is Japan's opponents, North Korea, who at the end of March in a game against Iran, where they lost 2-0, showed uncharacteristic, unbridled emotion. North Korean players near the end of the game pushing the referees, and following the game there were riots by North Korean fans, who blocked the bus of the Iranians to go back to their hotel.

FIFA, the body that governs soccer worldwide, ordered that North Korea's next home game be played in a neutral venue here in Thailand, and that no spectators be allowed in. The arena is closed. But, Carol, for the thousands and thousands of Japanese fans that have made their way to Bangkok in the days ahead, and the some 30,000 Japanese that now call Bangkok home, they are forced to watch this game on venues just blocks away from the stadium, but on TV.

But by all expectations, they're going to win. North Korea has lost all four of its qualifier games, and Japan only needs, Carol, a draw here to get into the World Cup next year.

COSTELLO: Aneesh Raman reporting live from Bangkok, Thailand, this morning.

Let's see what's coming up on "AMERICAN MORNING." Let's check in with Soledad O'Brien.

Good morning -- Soledad.

SOLEDAD O'BRIEN, CNN ANCHOR: Hey, Carol, good morning to you.

We're learning a little bit more about the two men who are being held in connection with Natalee Holloway's disappearance. The two security guards whose names have not yet been released, they're scheduled to appear before a judge today. A lawyer for one of the men says they are accused of homicide. We're going to talk to that attorney this morning.

Plus, guess who we're talking to? Guess who has written a book? Nancy Grace, you know her from "Headline Prime." The fiery former prosecutor tells us what she thinks is going on in the Holloway case; also the Michael Jackson trial. Always fascinating to have her weigh in on any case. She's got this new book, as I said. It's called "Objection." She gives her insight into the legal system and what's changed.

That's all ahead on this "AMERICAN MORNING." Carol, we'll see you at the top of the hour.

COSTELLO: I would have hoped the title would have been locked and loaded.

O'BRIEN: Yes. You know what? It's essentially the title, because she's -- you know, I love her, and she's wild. And so, I'm looking forward to talking to her.

COSTELLO: She is a feisty one. Thank you, Soledad.

Still to come on DAYBREAK, the Internet gets its own red light district. We'll explain.

But first, here's a look at what else is making news this Wednesday morning.

(COMMERCIAL BREAK)

COSTELLO: The international markets are mixed this morning. Tokyo's Nikkei up 63.5 points, the London FTSE down nearly 15, and the German DAX now down, oh, just 10.5 points.

A virtual red light district may be coming to a computer near you. A new plan would let adult sites use ".xxx" the way other sites use ".com."

For more on the porn plan, we turn to CNN's Sumi Das. She's in Washington.

Good morning.

SUMI DAS, CNN CORRESPONDENT: Good morning, Carol.

Well, XXX, it could be the go-to destination for online porn, making it easier for Web surfers of all ages to find adult entertainment and helping parents filter out the content that they don't want their kids to access.

(BEGIN VIDEOTAPE)

DAS (voice over): The motivation behind the XXX domain names seems fairly simple: money. Adult entertainment sites comprise a $12 billion industry. And one company, ICM Registry, will get a chunk of that by selling of the .xxx suffix.

Implementation may be more complex. Registering for a XXX site would be voluntary, but could provide adult sites with legal protection against charges of enticing children.

PARRY AFTAB, CHILD SAFETY ADVOCATE: This would be a safe harbor for the adult industry, because there's no question about the fact that they're not intentionally misleading child.

DAS: Proponents admit this is no magic bullet for parents seeking to shield children from explicit pictures and video.

AFTAB: Our kids have all kinds of problems online. Pornography is one of them. We call them the four Ps: privacy, predators, pornography and piracy. And I think parents need to be vigilant with everything.

DAS: Some worry governments may regulate the online space. The U.S. has the First Amendment, but regulations could lead to censorship elsewhere.

DECLAN MCCULLAGH, CNET.COM: You can imagine Saudi Arabia or Singapore or whatnot saying, well, information on homosexuality or birth control is x-rated, and so we want you to move your site into xxx, so then it could easily be blocked, maybe at a national level or at an international level. And if you don't do that, you'll go to jail.

DAS: XXX supporters maintain the suffix was never intended to be mandatory.

(END VIDEOTAPE) The U.S. Department of Commerce must also sign off on .xxx. If the department does that, which they are expected to do, the new Web addresses will most likely be available in the last fall.

Live in Washington, I'm Sumi Das -- Carol.

COSTELLO: Appreciate it, Sumi. Thank you.

Your news, money, weather and sports. It is 6:45 Eastern. Here's what's all new this morning.

In California, FBI agents have arrested two Muslim leaders in Lodi, along with a father and son. Authorities are reportedly probing possible links to al Qaeda.

In money news, two more airlines are saying that bankruptcy could be coming. Delta and Northwest Airlines told Congress that pension deadlines could lead to dire financial futures. The government has already been forced to take over pension plans from United and US Airways.

In culture, rock stars have added a show in Edinburgh, Scotland, to next month's Live 8 rock concerts. They're aimed at pressing world leaders to fight poverty in Africa. The Edinburgh show will be held about an hour away from where the leaders of the group of eight industrialized nations will be meeting.

In sports, the LPGA is going to a playoff system. Starting next year, women golfers will compete for a place in a 32-player playoff field. It is the first such playoff format in professional tournament golf. The winner is assured of a $1 million payday.

(WEATHER REPORT)

COSTELLO: That's a look at the latest headlines.

A follow-up now of a story we told you about in January. This amateur video shows University of Pittsburgh students being tossed around. A huge Pacific wave hit their ship during a Semester at Sea program. Remember that? Well, now their school is tossing Semester at Sea, dropping its sponsorship to the program. The group that runs the program is suing, saying the pullout is a contract breach.

Still to come on DAYBREAK, you'd think he would have learned to hold his tongue by now. Hear Howard Dean's latest outburst. That comes you way next on DAYBREAK.

(COMMERCIAL BREAK)

COSTELLO: Republicans say Howard Dean has been slinging some serious mud their way, and the Democratic Party chairman is sure getting his hands dirty. In a Washington speech last night, Dean said many Republicans have never made an honest living in their lives. You remember that.

Well, this week in San Francisco, he went even farther. Listen. (BEGIN VIDEO CLIP)

HOWARD DEAN, DNC CHAIRMAN: The Republicans are not very friendly to different kinds of people. They're a pretty monolithic party. They pretty much -- they all behave the same and they all look the same. And they all -- you know, it's pretty much a white Christian party.

(END VIDEO CLIP)

COSTELLO: Dean is defending his remarks. He tells CNN he doesn't hate Republicans. He just hates what their party is doing.

It's 6:51 Eastern. Here is what will be making news today.

John McCain will join the Black Eyed Peas for dinner. The senator from Arizona and the hip-hop group are among those getting awards in Washington from Rock the Vote. Former President Clinton is also being honored for his work in getting young people to the polls.

Actor Macaulay Culkin will be an Oklahoma City court in just over two hours. He faces misdemeanor drug charges stemming from a September arrest. Culkin has pleaded innocent.

And a very special birth. An Alabama woman had a baby girl this week after undergoing the first known successful ovary transplant in the United States. The transplant was done in St. Louis in April of 2004. That's the Web site in case you're interested.

And, Chad, you've got to love this.

CHAD MYERS, CNN METEOROLOGIST: Yes.

COSTELLO: Texas Instruments is replacing thousands of handheld calculators issued to students in Virginia. It seems that Dakota Brown (ph), a sixth grader, found that pressing a certain two keys converts decimals into fractions, and that's a no-no. It would give students an unfair advantage on standardized tests. You've got to do it with pencil and paper, kids.

MYERS: Well, I kind of like that fractional thing.

COSTELLO: Oh, we could do that.

MYERS: You know, the best key on that whole thing is one over x. I use that all the time. You have to (INAUDIBLE) or find out what it is anyway.

Carol, do you know what time it is?

COSTELLO: I believe it is time to give away our famous...

MYERS: Oh, no.

COSTELLO: I wish I had the (INAUDIBLE).

MYERS: You have the real mug. I have the paper one.

Here are the questions from yesterday and the winner, too. How many acres of land did Arlington National Cemetery recently acquire? And the answer was 70 acres. And what is the only city east of the Mississippi on the list of top wireless cities? Toledo, Ohio. Congratulations.

And the winner is Raymond Klepmer (ph) from Enterprise, Alabama, down there. Good morning, Raymond. Your mug is in the mail -- at least it will be in a few weeks.

Now the questions for today. This is a good one. How much per hour does the average GM worker make? And Bud Light's new bottle is made out of what material? Bottle is a little -- I don't want to call it a bottle.

COSTELLO: What?

MYERS: I don't know if you want to call it a bottle. We'll call it something.

COSTELLO: It is a new bottle.

MYERS: Bud Light's new vessel is made out of what material? Go to CNN.com/daybreak -- Carol.

COSTELLO: I like that, you're right. That's much better.

When we come back, more headlines and a look at your travel forecast. You're watching DAYBREAK for Wednesday.

(COMMERCIAL BREAK)

COSTELLO: I know a lot of you are watching us airports this morning.

(WEATHER REPORT)

COSTELLO: "Now in the News."

We are following a developing terror probe in northern California. The FBI has arrested four men in Lodi -- two local Muslim leaders, along with a father and son. Reports say agents are looking into possible al Qaeda links. Officials will release more details this morning.

And we could learn more today about a missing 18-year-old Alabama student. Two security guards for a hotel in Aruba are set to appear in court today. Their attorneys say prosecutors are looking at them as possible murder suspects in the disappearance of Natalee Holloway.

The Senate votes today on the nomination of California Supreme Court Justice Janice Rogers Brown to the federal appeals court for the District of Columbia. President Bush nominated Brown to the post two years ago. And the jury deliberating the child molestation case against Michael Jackson enters its third full day of deliberations this morning. Jackson is awaiting the verdict at his Neverland Ranch.

In Raleigh, North Carolina, 13 drivers are trapped, but only for a little while, after several utility lines came down during a fierce storm. Well, the drivers had to be guided to safety. No one was hurt. That's because they stayed in their cars.

From the Time Warner center in New York, I'm Carol Costello, along with Chad Myers. "AMERICAN MORNING" is next.

SOLEDAD O'BRIEN, CNN ANCHOR: Thanks, Carol. I'm Soledad O'Brien. A developing story. Federal agents bust a suspected terror cell in California. Four men in custody with possible ties to al Qaeda training camps. Their alleged targets? Hospitals and grocery stores. A live report is ahead.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com.


Aired June 8, 2005 - 06:29   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANNOUNCER: From the Time Warner center in New York, this is DAYBREAK, with Carol Costello and Chad Myers.
CAROL COSTELLO, CNN ANCHOR: And good morning, everyone.

New details this morning on terror suspects arrested in California. We'll have a live report for you straight ahead.

But first, "Now in the News."

We could learn more today about a missing 18-year-old Alabama student. Two security guards for a hotel in Aruba are set to appear in court today. Their attorney says prosecutors are looking at them as possible murder suspects in the disappearance of Natalee Holloway.

The U.S. Senate votes today on the nomination of California Supreme Court Justice Janice Rogers Brown to the federal appeals court for the District of Columbia. Brown was nominated to the post two years ago.

It's billed as the world's biggest permanent indoor sculpture, and it opens to the public today at Spain's Guggenheim (ph). It's called the "Matter of Time." The steel work is nearly one-and-a-half football fields in length. It weights 1,200 tons. American artist Richard Serra (ph) created the sculpture.

To the forecast center.

(WEATHER REPORT)

COSTELLO: In our "Security Watch" this morning, we're going to talk more about those arrests stemming from a terrorism investigation in Lodi, California. Federal agents have arrested four men. Two of those arrested are top Muslim leaders in Lodi. The other two, a father and son, appeared in federal court on charges they lied to agents.

Chris Lawrence joins us now live from Lodi with more details on this.

Good morning -- Chris.

CHRIS LAWRENCE, CNN CORRESPONDENT: Good morning, Carol.

We are getting some new information about these arrests. They have all happened since Sunday. And they were part of an ongoing investigation by federal officials into terrorist activities.

Two of the men arrested were top Muslim leaders here in Lodi, California, where we are. One is the cleric imam, or spiritual leader, of a local mosque. And the other is the former leader of that same mosque.

One of those top Muslim leaders, one of the men who was arrested in this federal investigation, actually publicly condemned the September 11 terrorist attacks. And he issued a declaration of peace with Christian and Jewish leaders in that community three years ago after September 11.

And then the other two were a father and son: 47-year-old Umer Hayat and 22-year-old Hamid Hayat. And Hamid Hayat, the younger Hayat, has been accused in this federal complaint of lying about involvement in a terrorist training camp, an al Qaeda training camp in Pakistan.

Basically, details of the investigation by the Joint Terrorism Task Force will be made public later this morning. Officials aren't saying much about the case until then, probably at 10:00 in the morning Pacific Time. We will get some more information.

But right now, we also know that the two Islamic leaders, the two imams, will be detained on immigration charges. The father and son, the Hayats, are both U.S. citizens, and they are being held in the local jail here near Lodi, California.

COSTELLO: So, Chris, can you clarify how these four may be connected?

LAWRENCE: Well, basically what we were able to determine, "The Los Angeles Times" right now is reporting that the two imams were taken into custody after they were seen meeting with the Hayats in Lodi here over the weekend. FBI spokesmen would not discuss the details.

But "The L.A. Times" quoted an affidavit filed in the case that said the younger Hayat failed a polygraph test over the weekend, in which he denied having attended an al Qaeda training camp in Pakistan. Well, that affidavit said he later he admitted that he trained there for six months between the years of 2003 and 2004.

His father was arrested for lying about giving his son an allowance, a $100 monthly allowance, while he attended that camp. This is all reported by "The Los Angeles Times."

COSTELLO: I'm sure we'll know much more later in the day. Chris Lawrence reporting live from Lodi, California, this morning.

A reminder to stay tuned to CNN day and night for the most reliable news about your security.

When President Bush's closest ally, Tony Blair, came to visit, they were supposed to focus on aid to Africa. The president and the British prime minister announced plans to write off a sizable chunk of Africa's debt. But as you probably expected, Iraq became a focus of the talks.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Both of us didn't want to use our military. Nobody wants to commit military into combat. It's a last option. The consequences of committing the military are very difficult. The hardest things I do as the president is to try to comfort families who have lost a loved one in combat. It's the last option that the president must have, and it's the last option I know my friend had as well.

(END VIDEO CLIP)

COSTELLO: Both leaders denied allegations in a British government memo, which stated the Bush administration wanted to remove Saddam Hussein through military action. And that -- quote, "The intelligence and the facts were being fixed around that policy."

In Iraq, a major operation targets insurgents near the Syrian border. It's urban warfare as U.S. and Iraqi forces carry out raids against specific targets and anything that looks suspicious. Troops are patrolling the streets in tanks with helicopters overhead. At least 28 suspected insurgents have been detained.

North Korea says it is ready to return to six-party nuclear talks, but has not said exactly when. A statement today from North Korea's official news agency quotes the foreign minister as saying, it's all up to Washington to establish the right environment for getting the talks back on track.

There will be no fanfare today, however, when North Korea plays a soccer game against Japan -- literally. In fact, there will be no fans at all.

For an explanation, we're joined by CNN's Aneesh Raman. He's in Bangkok, Thailand, which is the site of today's game.

Hello -- Aneesh.

ANEESH RAMAN, CNN CORRESPONDENT: Carol, good morning.

It is a surreal moment, as you say, for Japanese soccer fans, getting under way in a matter of moments. It's the game that by all expectations will get them into next year's World Cup. But the 30,000-seat stadium is empty. No spectators have been allowed in.

The reason is Japan's opponents, North Korea, who at the end of March in a game against Iran, where they lost 2-0, showed uncharacteristic, unbridled emotion. North Korean players near the end of the game pushing the referees, and following the game there were riots by North Korean fans, who blocked the bus of the Iranians to go back to their hotel.

FIFA, the body that governs soccer worldwide, ordered that North Korea's next home game be played in a neutral venue here in Thailand, and that no spectators be allowed in. The arena is closed. But, Carol, for the thousands and thousands of Japanese fans that have made their way to Bangkok in the days ahead, and the some 30,000 Japanese that now call Bangkok home, they are forced to watch this game on venues just blocks away from the stadium, but on TV.

But by all expectations, they're going to win. North Korea has lost all four of its qualifier games, and Japan only needs, Carol, a draw here to get into the World Cup next year.

COSTELLO: Aneesh Raman reporting live from Bangkok, Thailand, this morning.

Let's see what's coming up on "AMERICAN MORNING." Let's check in with Soledad O'Brien.

Good morning -- Soledad.

SOLEDAD O'BRIEN, CNN ANCHOR: Hey, Carol, good morning to you.

We're learning a little bit more about the two men who are being held in connection with Natalee Holloway's disappearance. The two security guards whose names have not yet been released, they're scheduled to appear before a judge today. A lawyer for one of the men says they are accused of homicide. We're going to talk to that attorney this morning.

Plus, guess who we're talking to? Guess who has written a book? Nancy Grace, you know her from "Headline Prime." The fiery former prosecutor tells us what she thinks is going on in the Holloway case; also the Michael Jackson trial. Always fascinating to have her weigh in on any case. She's got this new book, as I said. It's called "Objection." She gives her insight into the legal system and what's changed.

That's all ahead on this "AMERICAN MORNING." Carol, we'll see you at the top of the hour.

COSTELLO: I would have hoped the title would have been locked and loaded.

O'BRIEN: Yes. You know what? It's essentially the title, because she's -- you know, I love her, and she's wild. And so, I'm looking forward to talking to her.

COSTELLO: She is a feisty one. Thank you, Soledad.

Still to come on DAYBREAK, the Internet gets its own red light district. We'll explain.

But first, here's a look at what else is making news this Wednesday morning.

(COMMERCIAL BREAK)

COSTELLO: The international markets are mixed this morning. Tokyo's Nikkei up 63.5 points, the London FTSE down nearly 15, and the German DAX now down, oh, just 10.5 points.

A virtual red light district may be coming to a computer near you. A new plan would let adult sites use ".xxx" the way other sites use ".com."

For more on the porn plan, we turn to CNN's Sumi Das. She's in Washington.

Good morning.

SUMI DAS, CNN CORRESPONDENT: Good morning, Carol.

Well, XXX, it could be the go-to destination for online porn, making it easier for Web surfers of all ages to find adult entertainment and helping parents filter out the content that they don't want their kids to access.

(BEGIN VIDEOTAPE)

DAS (voice over): The motivation behind the XXX domain names seems fairly simple: money. Adult entertainment sites comprise a $12 billion industry. And one company, ICM Registry, will get a chunk of that by selling of the .xxx suffix.

Implementation may be more complex. Registering for a XXX site would be voluntary, but could provide adult sites with legal protection against charges of enticing children.

PARRY AFTAB, CHILD SAFETY ADVOCATE: This would be a safe harbor for the adult industry, because there's no question about the fact that they're not intentionally misleading child.

DAS: Proponents admit this is no magic bullet for parents seeking to shield children from explicit pictures and video.

AFTAB: Our kids have all kinds of problems online. Pornography is one of them. We call them the four Ps: privacy, predators, pornography and piracy. And I think parents need to be vigilant with everything.

DAS: Some worry governments may regulate the online space. The U.S. has the First Amendment, but regulations could lead to censorship elsewhere.

DECLAN MCCULLAGH, CNET.COM: You can imagine Saudi Arabia or Singapore or whatnot saying, well, information on homosexuality or birth control is x-rated, and so we want you to move your site into xxx, so then it could easily be blocked, maybe at a national level or at an international level. And if you don't do that, you'll go to jail.

DAS: XXX supporters maintain the suffix was never intended to be mandatory.

(END VIDEOTAPE) The U.S. Department of Commerce must also sign off on .xxx. If the department does that, which they are expected to do, the new Web addresses will most likely be available in the last fall.

Live in Washington, I'm Sumi Das -- Carol.

COSTELLO: Appreciate it, Sumi. Thank you.

Your news, money, weather and sports. It is 6:45 Eastern. Here's what's all new this morning.

In California, FBI agents have arrested two Muslim leaders in Lodi, along with a father and son. Authorities are reportedly probing possible links to al Qaeda.

In money news, two more airlines are saying that bankruptcy could be coming. Delta and Northwest Airlines told Congress that pension deadlines could lead to dire financial futures. The government has already been forced to take over pension plans from United and US Airways.

In culture, rock stars have added a show in Edinburgh, Scotland, to next month's Live 8 rock concerts. They're aimed at pressing world leaders to fight poverty in Africa. The Edinburgh show will be held about an hour away from where the leaders of the group of eight industrialized nations will be meeting.

In sports, the LPGA is going to a playoff system. Starting next year, women golfers will compete for a place in a 32-player playoff field. It is the first such playoff format in professional tournament golf. The winner is assured of a $1 million payday.

(WEATHER REPORT)

COSTELLO: That's a look at the latest headlines.

A follow-up now of a story we told you about in January. This amateur video shows University of Pittsburgh students being tossed around. A huge Pacific wave hit their ship during a Semester at Sea program. Remember that? Well, now their school is tossing Semester at Sea, dropping its sponsorship to the program. The group that runs the program is suing, saying the pullout is a contract breach.

Still to come on DAYBREAK, you'd think he would have learned to hold his tongue by now. Hear Howard Dean's latest outburst. That comes you way next on DAYBREAK.

(COMMERCIAL BREAK)

COSTELLO: Republicans say Howard Dean has been slinging some serious mud their way, and the Democratic Party chairman is sure getting his hands dirty. In a Washington speech last night, Dean said many Republicans have never made an honest living in their lives. You remember that.

Well, this week in San Francisco, he went even farther. Listen. (BEGIN VIDEO CLIP)

HOWARD DEAN, DNC CHAIRMAN: The Republicans are not very friendly to different kinds of people. They're a pretty monolithic party. They pretty much -- they all behave the same and they all look the same. And they all -- you know, it's pretty much a white Christian party.

(END VIDEO CLIP)

COSTELLO: Dean is defending his remarks. He tells CNN he doesn't hate Republicans. He just hates what their party is doing.

It's 6:51 Eastern. Here is what will be making news today.

John McCain will join the Black Eyed Peas for dinner. The senator from Arizona and the hip-hop group are among those getting awards in Washington from Rock the Vote. Former President Clinton is also being honored for his work in getting young people to the polls.

Actor Macaulay Culkin will be an Oklahoma City court in just over two hours. He faces misdemeanor drug charges stemming from a September arrest. Culkin has pleaded innocent.

And a very special birth. An Alabama woman had a baby girl this week after undergoing the first known successful ovary transplant in the United States. The transplant was done in St. Louis in April of 2004. That's the Web site in case you're interested.

And, Chad, you've got to love this.

CHAD MYERS, CNN METEOROLOGIST: Yes.

COSTELLO: Texas Instruments is replacing thousands of handheld calculators issued to students in Virginia. It seems that Dakota Brown (ph), a sixth grader, found that pressing a certain two keys converts decimals into fractions, and that's a no-no. It would give students an unfair advantage on standardized tests. You've got to do it with pencil and paper, kids.

MYERS: Well, I kind of like that fractional thing.

COSTELLO: Oh, we could do that.

MYERS: You know, the best key on that whole thing is one over x. I use that all the time. You have to (INAUDIBLE) or find out what it is anyway.

Carol, do you know what time it is?

COSTELLO: I believe it is time to give away our famous...

MYERS: Oh, no.

COSTELLO: I wish I had the (INAUDIBLE).

MYERS: You have the real mug. I have the paper one.

Here are the questions from yesterday and the winner, too. How many acres of land did Arlington National Cemetery recently acquire? And the answer was 70 acres. And what is the only city east of the Mississippi on the list of top wireless cities? Toledo, Ohio. Congratulations.

And the winner is Raymond Klepmer (ph) from Enterprise, Alabama, down there. Good morning, Raymond. Your mug is in the mail -- at least it will be in a few weeks.

Now the questions for today. This is a good one. How much per hour does the average GM worker make? And Bud Light's new bottle is made out of what material? Bottle is a little -- I don't want to call it a bottle.

COSTELLO: What?

MYERS: I don't know if you want to call it a bottle. We'll call it something.

COSTELLO: It is a new bottle.

MYERS: Bud Light's new vessel is made out of what material? Go to CNN.com/daybreak -- Carol.

COSTELLO: I like that, you're right. That's much better.

When we come back, more headlines and a look at your travel forecast. You're watching DAYBREAK for Wednesday.

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COSTELLO: I know a lot of you are watching us airports this morning.

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COSTELLO: "Now in the News."

We are following a developing terror probe in northern California. The FBI has arrested four men in Lodi -- two local Muslim leaders, along with a father and son. Reports say agents are looking into possible al Qaeda links. Officials will release more details this morning.

And we could learn more today about a missing 18-year-old Alabama student. Two security guards for a hotel in Aruba are set to appear in court today. Their attorneys say prosecutors are looking at them as possible murder suspects in the disappearance of Natalee Holloway.

The Senate votes today on the nomination of California Supreme Court Justice Janice Rogers Brown to the federal appeals court for the District of Columbia. President Bush nominated Brown to the post two years ago. And the jury deliberating the child molestation case against Michael Jackson enters its third full day of deliberations this morning. Jackson is awaiting the verdict at his Neverland Ranch.

In Raleigh, North Carolina, 13 drivers are trapped, but only for a little while, after several utility lines came down during a fierce storm. Well, the drivers had to be guided to safety. No one was hurt. That's because they stayed in their cars.

From the Time Warner center in New York, I'm Carol Costello, along with Chad Myers. "AMERICAN MORNING" is next.

SOLEDAD O'BRIEN, CNN ANCHOR: Thanks, Carol. I'm Soledad O'Brien. A developing story. Federal agents bust a suspected terror cell in California. Four men in custody with possible ties to al Qaeda training camps. Their alleged targets? Hospitals and grocery stores. A live report is ahead.

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